Suzy Davies, WTA Chair gave evidence to the initial meeting of the UK Covid-19 Inquiry themed around Travel and Tourism. This was an opportunity to help shape the work of the Inquiry by providing feedback on the draft Terms of Reference. The WTA attended the meeting alongside other industry organisations from around the UK. A transcript of our meeting will be published on our website at the end of the consultation period.
The Inquiry website has more information about the Inquiry and the public consultation is now open. Please share the link to the consultation with others: https://ukcovid19inquiry.citizenspace.com/contribute/terms-of-reference-consultation/ If you have any questions, please contact the Covid-19 Inquiry Set Up Team: Email: contact@covid19.public-inquiry.uk Website: https://covid19.public-inquiry.uk
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The UK Covid-19 Inquiry has held a roundtable meeting (22/03/2022) themed around Travel and Tourism. This was an opportunity for the WTA and its sister organisations from around the UK to shape the work of the Inquiry by providing feedback on the draft Terms of Reference. A full transcript of the meeting will be published on the website at the end of the consultation period. Covid-19 Inquiry Set Up Team.
The inquiry website has more information about and a public consultation is now open. The link to the consultation with others: https://ukcovid19inquiry.citizenspace.com/contribute/terms-of-reference-consultation/ Email: contact@covid19.public-inquiry.uk Website: https://covid19.public-inquiry.uk To help us lobby the Welsh Government to reduce the 182 day threshold we needed as much data as possible.
Thank-you to all those of you who completed this survey. The full body of evidence is now available on our WTA Consultations page which has now been submitted to the Welsh Government. https://www.wta.org.uk/consultation.html ![]() The Welsh Government has been warned that some businesses across Wales could be forced to close as an unintended consequence of proposed radical new taxation rules which are planned to be introduced next year. MWT Cymru, which represents more than 600 tourism and hospitality businesses across Powys, Ceredigion and Southern Snowdonia, has surveyed self-catering businesses across Wales to discover how they will be impacted by proposed taxation rules, which are linked to the ownership of second homes. From April next year, Welsh county councils will be given the power to increase council tax on second homes to 300%. In addition, the Welsh Government is making the rules a lot stricter on self-catering accommodation qualifying for business rates rather than council tax. Currently, self-catering properties in Wales must be available to let for a minimum of 140 days in any 12-month period, and actually let for at least 70 days to qualify for business rates rather than council tax. Under the propose new rules, properties must be available to let for at least 252 days and actually let for at least 182 days to qualify for business rates. MWT Cymru received 137 responses to its survey, with 66% of businesses saying they would be unable to meet the new rule of letting their properties for 182 days due to the short tourism season in Wales. Several businesses said they would be forced to consider closing as they could not afford to pay 300% council tax if their local authority decides to impose that rule. Val Hawkins, MWT Cymru’s chief executive, is calling on the Welsh Government to reconsider the radical taxation rules and she wants holiday let businesses to lobby councillors and Members of the Senedd on the issue. She believes the new rules on holiday lets will disproportionately impact businesses in rural Wales, particularly farmers who have diversified into tourism. She fears that all rural businesses, such as shops and pubs, will suffer the knock on effect if holiday let businesses close. She warned that if holiday let properties are sold, they will not necessarily boost the housing stock for local people for a variety of reasons, including being too expensive, having commercial conditions attached or being too large, small or remote. Mrs Hawkins says the severity of the new taxation rules has caught the tourism industry by complete surprise and self-catering accommodation might be the unintended victim of a clamp down on second home ownership in Wales. “From the responses to our survey, we know that many businesses would have to consider closing if the new taxation rules are introduced,” she said. “We hope the Welsh Government has already modelled that into their economic impact assessment. “There is deep concern about the proposed taxation rules from all types of holiday let businesses, from single to multiple let units. We fear that these rules will discourage new entrants from coming into the sector. “They will be unable to register for business rates until they have made their property available for at least 252 days and actually let it for at least 182 days. Then, there’s a possibility they could end up paying triple council tax at the end of the year if they fail to meet the threshold. “These new taxation rules will put pressure on the tourism economy at a time when local communities across Wales are struggling to recover from the impact of the pandemic and the increased cost of living crisis. The last thing we need is a reduction in the contribution that tourism businesses make to these communities. “The holiday let sector is being swept away with the rhetoric of second home ownership without any serious consideration being given to how the new taxation rules are going to impact communities in real terms. “We are urging the Welsh Government to urgently reconsider the threshold for letting holiday accommodation which is completely out of step with other parts of the UK. “It will be at the discretion of individual local authorities across Wales whether or not they impose the proposed new taxation rules. Surely, these local authorities don’t want to reduce tourism in their local economy as an unintended consequence of these rules? “The importance of the tourism sector to the Welsh economy, particularly in rural areas, cannot be overstated in terms of jobs supported and investment.” Response to Letter sent by WTA 8th March regarding the Retail, Hospitality and Leisure Rates Relief scheme.
In 2022-23, the Welsh Government will provide £116m of targeted non-domestic rates support to businesses in the retail, leisure and hospitality sectors. Ratepayers will be eligible for 50% off their liability for the financial year. The amount of relief under the Welsh Government’s Retail, Leisure and Hospitality Rates Relief (RLHRR) scheme will be capped at £110,000 per business across Wales. Our approach means that businesses in Wales will receive comparable support to that provided in other parts of the UK. To ensure businesses in Wales are sufficiently supported, and reflecting the nature of our tax base, we have invested an additional £20 million on top of the consequential funding received from the UK Government. This is in addition to our permanent relief schemes that provide over £240m of relief every year. Full guidance on the scheme is published on Business Wales webpages and as in previous years, the scheme will be administered by local government. The Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 will be application based, designed in a manner such that local authorities are able to ensure the £110,000 cap is accurately enforced across Wales. The scheme guidance and timescales for administration has been developed in conjunction with local authorities. Businesses that have been able to continue trading at a substantial level, such as food retailers, may opt not to apply for the relief despite being eligible. The scheme applies to rates liability from 1 April to 31 March for the relevant tax year. Any queries about eligibility for relief and the application process should be directed to the relevant local authority. The Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 will operate on a similar basis to how it has done in 2020-21 and 2021-22, using discretionary powers under section 47 of the Local Government Finance Act 1988, as such no legislation will be in place governing the specific operation of the scheme. Ukraine Refugee Crises – Welsh Government seeking in-principle support from the tourism industry14/3/2022 An appeal to the industry:
I'm sure we are utterly appalled at what is happening in Ukraine. We all feel for those women, children and elderly people who have fled, leaving their fathers, brothers and sons to fight an unjust war. Countries across the world have started to offer sanctuary to Ukrainian refugees, including the UK and, specifically, Wales. I know we may not feel particularly well-disposed towards Welsh Government at the moment, but they have asked for our help. They are drawing up plans as speedily as possible to find suitable temporary accommodation for refugees who have been forced to abandon their homeland. As we approach high season, many of your businesses will not have spare capacity anyway. However, if you think you might be able to help at least in-principle at this stage, even for a short period, please let us know. Although there are no details as yet, there will be a financial package offered to anyone who is a position to offer accommodation. The refugees are mainly women, their children and their elderly relatives. So that they are not isolated or separated, Welsh Government is looking for hotels, B&Bs and larger self-catering properties, including static parks or clusters of self-catering properties perhaps in the same village. You can understand why these desperate people will start to recover better if they know there are other Ukrainians nearby. Time is short and so I would be very grateful if you could give this some urgent thought, consult your own members and come back to me (suzy.davies.private@gmail.com) this week. This is about offering a hand to people who need our help. If we can respond positively, it also underlines how important the holiday accommodation sector is to Wales's reputation not just its economy and national wellbeing. I'm sure we will all make sure they remember that when it comes to other discussions with them. I look forward to hearing from you in the next few days. Best Wishes Suzy Suzy Davies Chair – Wales Tourism Alliance ALVA’s latest sentiment tracker survey the key findings are:
• There are now only small minorities – around 10% for indoor attractions - whose anxiety is strong enough to prevent them from visiting an attraction, which represents a very strong shift in positivity since summer 2021. There is now an overriding sense that the time has come to return to visiting attractions • However, ongoing visit nervousness is still apparent, with around 40% still expressing concerns about visiting attractions – mainly centring upon a continued anxiety about crowds • Many caveat a desire to return with a need (and sometimes, expectation) for some safety measures to be retained. Indeed, there remains over 40% of the market who disagree that all Covid-19 safety measures should be removed • There is a growing proportion of the audience who are pushing back against some of the more onerous measures – pre-booking, mask wearing and proof of vaccination status - to the extent that they are a visit barrier • General encouragement of pre-booking or perhaps compulsory pre-booking during busy periods now appears a more sustainable strategy than blanket compulsory pre-booking • It feels like the market still needs the ‘safety blanket’ of some overt Covid measures, even if these are primarily signals to demonstrate that an attraction has the best interests of its visitors at heart, and messaging around respecting fellow visitors • In deciding upon measures to retain and remove, we perhaps now need to change the question from ‘which measures keep our visitors safest?’ to ‘which measures least impact upon the experience?’ Open letter sent to Mrs Julie James M.S - Minister for Climate Change
Dear Minister, Technical Consultation on the draft Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 Please accept this open letter as an expression of our dismay at the contents of the draft order. While we have views on the level of council tax proposed, it is the threshold for distinguishing between a second home/casual let and a self-catering business (FHL) which is the subject matter of this letter. Your announcement of 2nd March 2022 came as a complete shock to the tourism industry, most particularly bona fide FHLs. Key representatives had responded in good faith to the consultation on second homes, as keen to distinguish between FHLs and second homes/casual lets as the Welsh Government is. In fact, FHLs had, themselves, offered the position that the current threshold is not sufficiently ambitious to create the distinction. The Wales Tourism Alliance had suggested that the NDBR thresholds be raised to parity with the HMRC’s availability condition of at least 210 days in the year (already an increase from the 140 days prior to 2012) and occupancy as a commercial, furnished holiday accommodation for at least 105 days in the year. This represents a 50% increase in both criteria, and is readily understood by FHLs, familiar with HMRC, making introduction less confusing. The draft order raises both those criteria dramatically: the number of days the property must be available rises from 140 to 252 days, an 80% increase, and the number of days a property must be let rises from 70 to 182 days, a rise of over 150%. There is no explanation as to why these figures have been chosen. Responses to Q9 in your own consultation are clear that this is not the majority position. That is despite the fact that many respondents were strongly anti-second homes and who, perhaps, did not distinguish between FHLs and domestic properties. Of the 155 responses suggesting a rise on the availability criterion, 149 proposed thresholds higher than the current 140 days, ranging from 150 to 365 days. The most common specific suggestion was 210 days a year. The most common specific suggestion for commercial occupancy was 105 days, with others ranging between 182 days or 6 months (9 responses). While we understand that you wish to take firm action on second homes and those who game the local tax system, these proposed changes show no understanding of how FHLs operate and how they deal with inconsistency of demand. FHLs would be delighted to be able to guarantee 182 days of occupancy. Some, perhaps, can in areas of exceptionally high demand. They are not typical of the sector. However, the thresholds you propose affect all Wales and are not discretionary (unlike the council tax premium on second homes). We want FHLs to pull out all the stops, but this occupancy threshold will be out of reach for too many, regardless of how hard they try, yet their contribution to their local economy and jobs market remains invaluable. Demand is down to the customer and the seasons. Even 52 long weekends would not reach the proposed occupancy threshold and it is a rare FHL that secures 52 long weekends. It would be extremely ambitious to think that the rest could be made up by weekly bookings in high season, especially in parts of Wales where under-tourism is the issue. We urge you to reconsider these thresholds, particularly the occupancy threshold. Even the most vigorous marketing of quality FHL accommodation cannot guarantee the equivalent of six months of end-to-end bookings. It would be erroneous to make any assumptions based on the pandemic period as this cannot be seen as indicative of future demand patterns. Furthermore, these proposals have been prepared on the assumption that all properties, whether FHLs or casual lets, would be suitable as homes. FHLs have to comply with industry standards (unlike casual lets) but this is not the same as for domestic residential lets:
We are not aware, either, of any modelling on how this will affect the tax take from the tourism industry, a matter of some interest to another Minister. Tourism businesses have made it clear they do not support the gaming of the local tax system and understand their role in contributing through fair taxation. These thresholds deny them the opportunity to pay fair local business tax. The tourism industry has found itself in a very unstable position because of Covid, recognised by the fact it had additional Welsh Government assistance during lockdown. The effects will not disappear overnight and it is very difficult to extrapolate anything from the figures for 2020 - 2022 in order to have a clear picture of the future. What is clear, though, is that - on top of other pressures recorded elsewhere - the cost-of-living rises will affect businesses and, just as importantly, those who would like to holiday in Wales; a good quarter of them are from Wales itself. Welsh Government’s own research points to the family budget being the main predictor of holiday choices. The industry is facing a growing trend of last-minute booking and, now, fierce competition from the lower price-point overseas holiday market. Wales tourism is more than its coastal hotspots. It has been caught up in attempts to mitigate lack of investment in housing supply and local authority budgets at a time when it is trying to find some equilibrium, retain its good reputation, provide jobs and contribute to the country’s coffers. Please don’t throw the baby out with the bathwater. Yours sincerely, Suzy Davies Chair – Wales Tourism Alliance c.c. Vaughan Gething M.S. – Minister for the Economy & Transport of Wales c.c. Rebecca Evans M.S. - Minister for Finance & Local Government The Welsh Government has announced potential new measures to address the issue of second home owners pricing locals out of the housing market in popular tourism destinations.
The first measure is to allow local councils to set council tax premiums of up to 300% on second homes and long-term empty properties from April 2023 (the current allowed premium is 100%). Individual councils will be allowed to determine whether they apply a premium, the level of the premium (up to the 300% maximum) and whether different premiums should be set for second homes and vacant homes. The second measure, which is more important for the tourism industry is the announcement that the criteria for self-catering accommodation being eligible for business rates instead of council tax will also change from next April. The current requirement is for properties to be available to let for at least 140 days a year and let for at least 70 days a year in order to be eligible for business rates. From next April this will increase significantly to having to be available to rent for at least 252 days and actually let for at least 182 days in any 12-month period. The Wales Tourism Alliance is extremely concerned about this proposed second measure and will be responding to the consultation. These proposals will be significantly greater than the requirement for self-catering operators in England (available for 140 days a rented for 70 days a year the current Wales level) and there are concerns that many self-catering businesses will be able to achieve these new thresholds. https://gov.wales/new-tax-rules-second-homes The ONS has published new data on employment in the UK from 2014 to 2021. This includes a section on the accommodation and food services which highlights both the impact of Covid and Brexit on employment in the sector. Some of the key findings are:
https://www.gov.uk/government/statistics/payrolled-employments-in-the-uk-by-region-industry-and-nationality-from-july-2014-to-june-2021/payrolled-employments-in-the-uk-by-region-industry-and-nationality-from-july-2014-to-june-2021 |